Cogent Communications (NASDAQ:CCOI) Shares Down 7.2% - Here's Why

Key Points

• Cogent Communications shares fell by 7.2% amid trading, with a significant drop in trading volume, marking an 85% decline from its average daily volume.
• Multiple analysts have reduced their price targets for Cogent Communications, with UBS Group lowering it from $102 to $75 and Citigroup cutting their target from $67 to $33, while the consensus target price now stands at $60.83.
• The company recently announced a quarterly dividend of $1.015 per share, a slight increase from the previous $1.01, alongside a new stock buyback plan allowing the purchase of up to $100 million in shares.

Cogent Communications Holdings, Inc. (NASDAQ:CCOI - Get Free Report) shares fell 7.2% during mid-day trading on Thursday . The company traded as low as $32.48 and last traded at $32.34. 107,777 shares traded hands during trading, a decline of 85% from the average session volume of 705,218 shares. The stock had previously closed at $34.83.

Analyst Upgrades and Downgrades

Several research analysts recently issued reports on the company. The Goldman Sachs Group cut their price objective on Cogent Communications from $71.00 to $62.00 and set a "neutral" rating for the company in a research report on Friday, May 9th. Royal Bank Of Canada reiterated a "sector perform" rating and issued a $40.00 target price (down from $74.00) on shares of Cogent Communications in a research note on Friday, August 8th. Wells Fargo & Company upgraded Cogent Communications from an "underweight" rating to an "overweight" rating and set a $45.00 price target for the company in a report on Monday. Citigroup lowered shares of Cogent Communications from a "buy" rating to a "neutral" rating and cut their price objective for the stock from $67.00 to $33.00 in a report on Tuesday, August 12th. Finally, UBS Group lowered their target price on shares of Cogent Communications from $102.00 to $75.00 and set a "buy" rating for the company in a report on Friday, May 9th. Three equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, Cogent Communications has an average rating of "Hold" and an average target price of $58.57.

Cogent Communications Stock Performance

The company has a debt-to-equity ratio of 49.06, a quick ratio of 2.31 and a current ratio of 2.31. The stock has a fifty day simple moving average of $45.95 and a two-hundred day simple moving average of $55.93. The stock has a market cap of $1.86 billion, a PE ratio of -8.31 and a beta of 0.68.

Cogent Communications (NASDAQ:CCOI - Get Free Report) last posted its earnings results on Thursday, August 7th. The technology company reported ($1.21) EPS for the quarter, missing analysts' consensus estimates of ($0.93) by ($0.28). The firm had revenue of $246.25 million for the quarter, compared to analyst estimates of $247.79 million. Cogent Communications had a negative return on equity of 117.56% and a negative net margin of 21.57%.The company's revenue for the quarter was down 5.4% on a year-over-year basis. During the same period in the previous year, the firm posted ($0.68) earnings per share. Equities analysts anticipate that Cogent Communications Holdings, Inc. will post -4.55 EPS for the current fiscal year.

Cogent Communications Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, September 5th. Stockholders of record on Thursday, August 21st will be given a dividend of $1.015 per share. The ex-dividend date of this dividend is Thursday, August 21st. This is an increase from Cogent Communications's previous quarterly dividend of $1.01. This represents a $4.06 dividend on an annualized basis and a dividend yield of 10.8%. Cogent Communications's dividend payout ratio is -88.99%.

Cogent Communications announced that its Board of Directors has initiated a share repurchase program on Thursday, August 7th that authorizes the company to repurchase $100.00 million in shares. This repurchase authorization authorizes the technology company to buy up to 4.6% of its stock through open market purchases. Stock repurchase programs are typically an indication that the company's management believes its shares are undervalued.

Insider Buying and Selling

In other Cogent Communications news, CEO Dave Schaeffer sold 1,840,669 shares of the firm's stock in a transaction on Thursday, August 7th. The shares were sold at an average price of $32.60, for a total transaction of $60,005,809.40. Following the completion of the transaction, the chief executive officer directly owned 1,516,052 shares of the company's stock, valued at $49,423,295.20. This trade represents a 54.84% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. In the last 90 days, insiders have sold 3,105,078 shares of company stock worth $103,810,876. Corporate insiders own 10.20% of the company's stock.

Institutional Trading of Cogent Communications

Several hedge funds have recently made changes to their positions in the stock. Public Sector Pension Investment Board increased its position in Cogent Communications by 8.1% in the second quarter. Public Sector Pension Investment Board now owns 144,696 shares of the technology company's stock worth $6,976,000 after buying an additional 10,783 shares during the period. FORA Capital LLC acquired a new stake in shares of Cogent Communications during the second quarter valued at approximately $566,000. Headlands Technologies LLC purchased a new stake in shares of Cogent Communications in the 2nd quarter valued at approximately $98,000. Tower Research Capital LLC TRC boosted its stake in Cogent Communications by 4,191.2% in the 2nd quarter. Tower Research Capital LLC TRC now owns 7,810 shares of the technology company's stock worth $377,000 after purchasing an additional 7,628 shares during the period. Finally, Resources Management Corp CT ADV grew its position in Cogent Communications by 7,241.4% during the 2nd quarter. Resources Management Corp CT ADV now owns 57,997 shares of the technology company's stock worth $2,796,000 after purchasing an additional 57,207 shares in the last quarter. Institutional investors own 92.45% of the company's stock.

About Cogent Communications

Cogent Communications Holdings, Inc, through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services in North America, Europe, Oceania, South America, and Africa. The company offers on-net Internet access and private network services to law firms, financial services firms, and advertising and marketing firms, as well as heath care providers, educational institutions and other professional services businesses, other Internet service providers, telephone companies, cable television companies, web hosting companies, media service providers, mobile phone operators, content delivery network companies, and commercial content and application service providers.